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Poverty - Expanding Financial Services in Developing Countries

Expanding Financial Services in Developing Countries

Issue

“It is the ability to control capital that gives people the power to rise out of poverty.”
— Muhammad Yunus, Founder, Grameen Bank

Funding

Less than 4% of foundation giving for poverty in developing countries in 2007 supported expanding access to financial services

Challenge

How can we use investment as a tool to lift people out of poverty?

Strategies

  • Make community investment accessible to a wide audience
  • Create investment products that blend financial and social returns
  • Mobilize individual investor capital to support microfinance

Case Study

MicroPlace
  • Web service launched by eBay in 2007
  • People invest in the world’s working poor while earning financial returns
  • Calvert Foundation was the first issuer to sell investments on its site
  • Funds raised by the Calvert Foundation from securities sales are invested in microfinance institutions targeted by online investors
  • Calvert Foundation received $16 million in grants from private funders for start-up costs and a risk capital pool
  • Funders include Omidyar Network, MacArthur and Rockefeller foundations

Results

MicroPlace’s first-year successes:
  • More than 6,500 members
  • More than 26,000 loans to entrepreneurs in 34 countries
  • Higher than 2% average return on investment, while the S&P returned -35.97%

Research Sources


Microfinance: An Emerging Investment Opportunity
Deutsche Bank
12/2007


MicroPlace




Calvert Social Investment Foundation

Leading Foundations Bolster Calvert Foundation in Online Microfinance Initiative Investing in the Working Poor
1/29/2008

MicroPlace Launches Investment Website to Address Global Poverty
10/10/2007


Omidyar Network



The John D. and Catherine T. MacArthur Foundation


The Rockefeller Foundation


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